Som Foods & Iron Private Limited, RAIPUR (CG) V. Assistant Commissioner of Income Tax-1(2), RAIPUR (CG)

ITA 171/BIL/2011

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0526 (ITAT-RAIPUR)
• Duration Of Justice: 4 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 08-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K MEENA
• Assessee Lawyers: S R RAO

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ./ ITA NO. 171/BLPR/2011 / ASSESSMENT YEAR: 2007 - 08 SOM FOODS & IRON PVT. LTD., URLA, RAIPUR (C.G.) PAN : AAGCS 0165 D VS. ASSISTANT COMMISSIONER OF INCOME TAX 1(2), RAIPUR / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI S.R. RAO, AR REVENUE BY : SHRI S.K. MEENA, DR / DATE OF HEARING : 12 / 10 /2015 / DATE OF PRONOUNCEMENT: 15 / 10 /201 5 / O R D E R PER SHAMIM YAHYA , ACCOUNTANT MEMBER : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) , RAIPUR (CG), DATED 30.12.2010 AND PERTAINS TO ASSESSMENT YEAR 200 7 - 0 8 . 2. THE ISSUE RAISED IS THAT THE CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS.1,46,350/ - BEING THE VALUE OF ITEMS LYING OUTSIDE THE COLD STORAGE, ADDED AS UNEXPLAINED STOCK OF THE ASSESSEE. 3. IN THIS CASE, ACCORDING TO THE ASSESSING OFFICER, DURING THE COURSE OF SURVEY IN THE BUSINESS PREMISES OF SOM COLD STORAGE, WHICH WORKS UNDER THE APPELLANT - COMPANY CERTAIN ITEMS, TOTALING TO RS.1,46,350/ - WERE FOUND LYING OUTSIDE THE COLD STORAGE BUILDING. WHEN CONFRONTED TO EXPLAIN AS TO WHY THE SAME SHOULD NOT BE TREATED AS UNACCOUNTED STOCK OF THE APPELLANT - COMPANY, IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE APPELLANT - COMPANY THROUGH ITS COL D STORAGE IN THE NAME OF SOM COLD STORAGE, PRESERVED VARIOUS COMMODITIES LIKE ITA NO. 171/BLPR/2011 SOM FOODS & IRON PVT LTD VS. ACIT AY: 2007 - 08 2 MAHUWA, LAKHADI, IMLI, AMCHUR, CHARGUTLI ETC., FOR WHICH THE APPELLANT GOT PRESERVATION CHARGES FROM THE PARTY AND THAT THIS WAS ONLY THE BUSINESS OF THE APPELLANT - COMPANY AND NOT ANY TRADING ACTIVITY OF THE ABOVE ITEMS. ACCORDING TO THE APPELLANT, SINCE THE STOCK FOUND BY THE SURVEY TEAM , BELONGED TO VARIOUS PARTIES, NO ADDITION SHOULD BE MADE IN THE CASE OF THE APPELLANT PRESUMING THE AFOREMENTIONED TO BE THE UNRECORDED STOCK OF THE APPELLANT. ACCORDING TO THE AO, THE ITEMS, VALUED AT RS.1,46,350/ - , WERE NOT FOUND RECORDED IN THE REGISTER KEPT BY THE APPELLANT. NO DOCUMENTARY EVIDENCE WAS ADDUCED FOR NON - RECORDING OF THESE ITEMS IN THE STOCK REGISTER. HENCE, THE VALUE OF THE SE ITEMS, AMOUNTING TO RS.1,46,350/ - , BEING UNEXPLAINED STOCK OF THE APPELLANT, WAS ADDED AS HAVING BEEN ACQUIRED FROM THE UNDISCLOSED INCOME OF THE APPELLANT. 4. UPON ASSESSEES APPEAL, LEARNED CIT(A) CONFIRMED THE ADDITION. 5. AGAINST THE AFORESAID ORDER OF THE LEARNED CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US. 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE RECORD. WE FIND THAT THAT THE ASSESSEE IN THIS CASE IS RUNNING A COLD STORAGE. CERTAIN ITEMS WERE FOUND LYING OUTSIDE THE COLD STORAGE BU ILDING BY INCOME - TAX S URVEY TEAM. THE EXPLANATION OF THE ASSESSEE IN THIS REGARD WAS THAT THE ASSESSEE WAS PROVIDING STORAGE FACILITY FOR THESE ITEMS AND SINCE THERE WAS LACK OF SPACE THESE ITEMS WERE LYING OUTSIDE THE COLD STORAGE , PENDING THEIR A DJUSTMENT IN THE COLD STORAGE PREMISES. THIS SUBMISSION HAS BEEN REJECTED BY THE ASSESSING OFFICER ON THE GROUND THAT THESE ITEMS WERE NOT RECORDED IN THE STOCK REGISTER. THE LEARNED CIT(A) HAS ALSO CONFIRMED THE ADDITION BY PLACING RELIANCE UPON ITA NO. 171/BLPR/2011 SOM FOODS & IRON PVT LTD VS. ACIT AY: 2007 - 08 3 CERTAIN CASE LAWS WHERE THE EXCESS STOCKS WERE FOUND DURING SURVEY WAS ADDED. 7. IN OUR CONSIDERED OPINION, THE CASE LAWS REFERRED BY THE LEARNED CIT(A) ARE NOT APPLICABLE ON THE FACTS OF THE PRESENT CASE. IN THIS CASE, THE ASSESSEE IS NOT MAINTAINING ANY STO CK OR DEALING OR TRADING OR MAKING ANY TRANSACTIONS IN STOCKS AND SIMILAR ITEMS. AS A MATTER OF FACT, THE ASSESSEE IS RUNNING COLD STORAGE AND NO FINDING IS THERE THAT THE ASSESSEE IS ENGAGED IN TRADING OF GOODS. T O SUPPORT ITS CLAIM THAT THESE ITEMS WER E RELYING OUTSIDE THE COLD STORAGE, PENDING THEIR ADJUSTMENT INSIDE THE COLD STORAGE PREMISES, THE ASSESSEE HAS ALSO GIVEN SUPPORTING S RELATING TO LOT NUMBERS MENTIONED IN THE REGISTER FOR THE SUBSEQUENT ACCOMMODATION INSIDE THE COLD STORAGE. THIS HAS NOT AT ALL BEEN CONSIDERED BY THE AUTHORITIES BELOW . IN OUR CONSIDERED OPINION, WITHOUT GIVING ANY REASON AS TO WHY THESE SUBMISSIONS OF THE ASSESSEE ARE NOT RELIABLE OR ANY FINDING THAT THE ASSESSEE IS TRADING IN GOODS , THE ADDITION OF RS.1,46,350/ - IS NOT J USTIFIED. ACCORDINGLY, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND HOLD THAT THE IMPUGNED ADDITION IS NOT SUSTAINABLE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 1 5 T H OCTOBER, 2015 AT RAIPUR . SD/ - SD/ - (MUKUL KR. SHRAWAT) JUDICIAL MEMBER (SHAMIM YAHYA) ACCOUNTANT MEMBER RAIPUR ; DATED 1 5 / 1 0 /201 5 BIJU T., PS ITA NO. 171/BLPR/2011 SOM FOODS & IRON PVT LTD VS. ACIT AY: 2007 - 08 4 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, RAIPUR 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, RAIPUR